Social Distancing in 2020 Gave Impetus to the Incipient Electronic Commerce in Costa Rica

    A drastic change has occured in the way people buy goods or services

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    Confinement and social distancing, as well as restrictions on mobility during 2020, led the Costa Rican population to resort to greater use of electronic commerce. At the same time, the rise of this type of commerce translated into a greater demand for information and communication services and messaging services, to support sales through non-traditional channels.

    The Central Bank of Costa Rica reached this conclusion, after an analysis of economic activity during the first year of the COVID-19 Pandemic. The entity identified as “sales through non-traditional trade channels” the modalities other than the in-person.

    Likewise, it classified as “digital intermediaries” the services provided through technological platforms such as Uber, Uber Eats, Glovo, Didi, Rappi, Expedia, Booking, Despegar, Amazon, Airbnb, among others. In the group of “Social Networks” it included the commerce that emerged on Facebook, Instagram and WhatsApp.

    The Organization for Economic Cooperation and Development (OECD) defines electronic commerce as “the sale or purchase of goods or services carried out through computer networks with methods specifically designed to receive or place orders.

    Growing numbers

    As an example, the Central Bank cited that courier services registered an average growth of 35.7% in the last twelve months, in a context of generalized contraction of economic activity. Other economic activities have also found in the use of non-contact sales a way to mitigate the negative effects of the crisis.

    For example, digital commerce (sales made on web pages and through digital intermediaries) increased by 2.7 percentage points in 2020 compared to 2019. As a result, service activities made 18% of their sales through these means.

    Before the crisis, the Central Bank explained, it was common for some service activities to have digital sales options available to their users, such as hotels. However, it is from the measures of trade closures and mobility restrictions that other types of services intensively use this technology to make their sales and thus mitigate the consequences of the COVID-19 Pandemic.

    That includes restaurant services, which after the emergency declaration increased sales through digital intermediaries such as Uber Eats, Glovo and Rappi, to mention the main ones. Business and education services also turned to virtual options to offer their services.

    In commercial activity, an increase was observed in the sales made on their websites, which was possible in turn due to the existence of safe and cheap electronic means of payment, such as Sinpe Móvil.

    Input purchases

    Local actions and those imposed by the rest of the countries led to a change not only in the way in which national companies sell their products, but also in the way in which they buy their inputs, be they goods or services.

    According to the Central Bank’s findings, companies also had to resort to more intensive use of non-traditional media. “There is evidence that this process of change from in-person to non in-person sales and purchases had begun before 2020. However, this form of transactionality accelerated during the pandemic as a response of human ingenuity to mobility limitations”, indicated the entity in its last report on the Monthly Index of Economic Activity, cut to March.

    The Central Bank considers that the digitization of the economy, perceived with greater force in 2020, is in part an adaptation of economic agents to the new environment imposed by the Pandemic.

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